News 01 October 2008

PRELIMINARY RESULTS

Spitfire
Oil Limited (“Spitfire Oil” or the “Company”),
has today published its results for the period ended 30 June 2008, a
summary of which is attached.

Spitfire
Oil was incorporated on 2 May
2007 and on 11 July 2007 acquired the entire issued capital of
Spitfire Oil Pty Ltd (formerly Hurricane Fuels Pty Ltd) (together
“the Group”) by way of a share swap. On 18 July 2007
Spitfire Oil’s shares were admitted to trading on the
Alternative Investment Market ("AIM") of the London Stock
Exchange. At the same time the Company placed 16,666,667 new
Ordinary Shares at 60p per share to raise £10,000,000
(A$23,298,000).

The
Group’s principal
activity is the pursuance of the production of fuel oil and
distillate from the Salmon Gums Lignite deposits in Western
Australia. As of 30 June 2008, the Company controlled 6 exploration
tenements totalling 519 km2
near Salmon Gums, near Esperance, in the south east of Western
Australia. The tenements contain a large lignite (brown coal)
deposit with an Inferred Resource, calculated according to the JORC
Code, of 500 million tonnes of lignite. The lignite has a high
Kerogen (hydrocarbon) content convertible into oil using low
temperature pyrolysis at a yield of 0.43 bbl / tonne. Extractable
commercial oil reserves are estimated to exceed 200 million barrels.

The
Group has reported a loss before tax A$2,828,901
in the period from incorporation to 30 June 2008.

Began
a 2 year, A$4.4 million contract with Curtin University to prove its
L2VTM
low temperature pyrolysis technology. A new laboratory and a
prototype reactor were constructed, specialist research personnel
were recruited and technical work started.

The
Environmental approval process was initiated and the project was
assessed at the Environmental Review and Management Plan level.

A
new Chief Executive was recruited with world class experience in the
construction of large oil & gas processing plants and in
environmentally sensitive projects based in Western Australia. All
management functions have been transferred to Perth.

The near term objectives of Spitfire are now to:

Complete
an exploration drilling program to calculate an Indicated Resource
under the JORC Code and apply for additional mining leases as
applicable.

Complete
the L2VTM
Pyrolysis tests at Curtin University and complete conceptual mine
and process engineering studies to deliver a definitive feasibility
study and a design basis for a phase 1 commercial plant.

Progress
the environmental approval process.

Chairman’s Statement

“For
an entity only admitted to trading on the Alternative Investment
Market of the London Stock Exchange in July 2007, its progress
towards proof of concept and commercialization has been impressive.

Although
the events of the past month have been particularly devastating for
the world financial system which, to some extent has been or will be
passed through to the world economy, the gratifying aspect for the
Company of these calamitous events has been the continuing high price
for crude oil and distillates. This, coupled with the ever
decreasing size of the world’s recoverable oil reserves, gives
real hope that the Company will reap significant financial rewards
should the Salmon Gums project come into commercial operation.

It has
been heartening to see the progress that has been made to move the
Company ever closer to commercialization. Resource delineation,
exploration and environmental approvals have all made sizeable move
forwards. The focus this year shifts to the laboratory to ensure oil
yields are extractable and by products of the Pyrolysis process do
not cause any negative impacts to either the extraction process or
the environment. We remain ever hopeful of that those results will
be extremely positive.

Needless
to say, the Company also has not been blinded to other means to grow
shareholder value. In that respect, the Company has evaluated a
number of other oil and gas projects. At this stage, most of these
projects do not meet the risk profile or the financial returns
required by the Company.”

SPITFIRE OIL PTY LIMITED
Income Statement For the period ended 30 June 2008
(expressed in Australian dollars)

Consolidated
Group

Parent
Entity

2008

2008

A$

A$

Other
Revenue

1,251,885

949,590

Corporate
expenses

(1,410,557)

(1,035,345)

Impairment
of goodwill

(534,439)

-

Technology
and development

(1,883,681)

-

Other
expenses

(234,326)

(2,743,146)

Promotion
and investor relations

(17,783)

-

Loss
before income tax

(2,828,901)

(2,828,901)

Income
tax expense

-

-

Loss
for the period

(2,828,901)

(2,828,901)

Basic
loss per share (cents per share)

(7.06)

Diluted
loss per share (cents per share)

(7.06)

Spitfire Oil pty Limited
Balance Sheet As at 30 June 2008
(expressed in Australian dollars)

Consolidated
Group

Parent
Entity

2008

2008

A$

A$

ASSETS

CURRENT
ASSETS

Cash and
cash equivalents

14,100,639

14,037,046

Trade
and other receivables

194,553

-

Other
current assets

36,270

36,270

TOTAL
CURRENT ASSETS

14,331,462

14,073,316

NON-CURRENT
ASSETS

Trade
and other receivables

-

2,556,540

Other
assets

-

1,465

Property,
plant and equipment

41,220

-

Intangible
assets

3,416,172

-

TOTAL
NON-CURRENT ASSETS

3,457,392

2,558,005

TOTAL
ASSETS

17,788,854

16,631,321

LIABILITIES

CURRENT
LIABILITIES

Trade
and other payables

1,172,319

14,786

TOTAL
CURRENT LIABILITIES

1,172,319

14,786

TOTAL
LIABILITIES

1,172,319

14,786

NET
ASSETS

16,616,535

16,616,535

EQUITY

Issued
capital

20,854,412

20,854,412

Reserves

(1,408,976)

(1,408,976)

Accumulated
loss

(2,828,901)

(2,828,901)

TOTAL
EQUITY

16,616,535

16,616,535

Spitfire Oil Pty Limited
Statement of Changes in Equity For the period ended 30 June 2008
(expressed in Australian dollars)

Consolidated
Group

Issued
Capital

Foreign
Currency Translation

Accumulated
Losses

Share
Based Remuneration

Total

A$

A$

A$

A$

A$

Balance
at 2 May 2007

-

-

-

-

-

Shares
issued

23,300,973

-

-

-

23,300,973

Share
issuance costs

(2,446,561)

-

-

-

(2,446,561)

Share
based remuneration

-

-

-

592,667

592,667

Translation
of Foreign currency

-

(2,001,643)

-

-

(2,001,643)

Net
(Loss) for the period

-

-

(2,828,901)

-

(2,828,901)

Balance
at 30 June 2008

20,854,412

(2,001,643)

(2,828,901)

592,667

16,616,535

Parent
Entity

Issued
Capital

Foreign
Currency Translation

Accumulated
Losses

Share
Based Remuneration

Total

A$

A$

A$

A$

A$

Balance
at 2 May 2007

-

-

-

-

-

Shares
issued

23,300,973

-

-

-

23,300,973

Share
issuance costs

(2,446,561)

-

-

-

(2,446,561)

Share
based remuneration

-

-

-

592,667

592,667

Translation
of Foreign currency

-

(2,001,643)

-

-

(2,001,643)

Net
(Loss) for the period

-

-

(2,828,901)

-

(2,828,901)

Balance
at 30 June 2008

20,854,412

(2,001,643)

(2,828,901)

592,667

16,616,535

Spitfire Oil Pty Limited
Cash Flow Statement For the period ended 30 June 2008
(expressed in Australian dollars)

Consolidated
Group

Parent
Entity

2008

2008

A$

A$

CASH
FLOWS RELATED TO OPERATING ACTIVITIES

Payments
to suppliers and employees

(2,818,468)

(570,515)

Interest
received

965,664

949,590

R&D
tax concession received

277,788

-

CASH
FLOWS USED IN OPERATING ACTIVITIES

(1,577,016)

379,075

CASH
FLOWS RELATED TO INVESTING ACTIVITIES

Advances
to subsidiary

-

(5,193,333)

Payment
for purchases of plant and equipment

(45,262)

-

Payment
for purchases of equity investments

-

(1,465)

Exploration
Expenditure

(3,131,852)

-

CASH
FLOWS USED IN INVESTING ACTIVITIES

(3,177,114)

(5,194,798)

CASH
FLOWS RELATED TO FINANCING ACTIVITIES

Proceeds
from issues of securities

20,854,412

20,854,412

CASH
FLOW FROM FINANCING ACTIVITIES

20,854,412

20,854,412

NET
INCREASE IN CASH AND CASH EQUIVALENTS

16,102,282

16,038,689

Cash and
cash equivalents at the beginning of the year

-

-

Effects
of exchange rate changes on cash and cash equivalents

(2,001,643)

(2,001,643)

CASH
AND CASH EQUIVALENTS AT THE END OF THE YEAR

14,100,639

14,037,046

Notes:

Spitfire
Oil Limited was incorporated
on 2 May 2007.

This
statement has been prepared using accounting policies and
presentation consistent with those applied in the preparation of the
statutory accounts of the Group.

The
summary accounts set out above do not constitute statutory accounts
as defined by Section 84 of the Bermuda Companies Act 1981 or
Section 240 of the UK Companies Act 1985. The summarised
consolidated and parent balance sheets at 30 June 2008 and the
summarised consolidated and parent income statements, consolidated
and parent statements of changes in equity and the summarised
consolidated and parent cash flow statements for the period then
ended have been extracted from the Group’s 2008 statutory
financial statements upon which the auditors’ opinion is
unqualified. The statutory
financial statements for the period 2 May 2007 to 30 June 2008 have
been prepared in accordance with the requirements of International
Accounting Standard IAS1: Presentation of Financial Statements as
adopted in Australia.

The
annual report and accounts for 2008 are being sent by post to all
registered shareholders. Additional copies of the annual report and
accounts are available from the Company’s London correspondent
office, 6th
Floor, 60 St James’s Street, London, SW1A 1LE.

The
calculation of the basic losses per share is based on the loss
attributable to ordinary shareholders of A$2,828,901 divided by the
weighted average number of shares in issue during the year of
40,050,309. There is no dilutive effect of share
purchase options.